A Qualified Retirement Plan is a type of retirement plan established by an employer for the benefit of the company's employees (A 401(k) is one of the most common example). These plans are typically quite restrictive in nature and limit investments to shares in publically traded companies, mutual funds and money market funds. Over the years many investors have recognized that holding alternative investments in a qualified plan can have significant benefits in growing their retirement accounts.
In order to achieve these goals investors elect to "rollover" their qualified plans (401(k)) into self-directed IRA's which provide many of the same benefits of qualified plans but provide investors with a lot more flexibility and control over their money.
While alternative investments can include investment vehicles such as precious metals, commodities and promissory notes, Royal Northgate falls under the umbrella of private equity real estate. There is an important differentiation between what we offer and simply purchasing real estate in your IRA –see below:
We offer extensive diversification. Instead of purchasing one real estate asset, investing with us allows you to participate in the growth of hundreds.
You may have to take on debt in your IRA through a non-recourse loan in order to purchase a piece of real estate. You will not incur any debt investing with us.
By purchasing real estate in your IRA you are responsible for ALL ongoing expenses associated with that asset: loan payments, condo fees, insurance, property taxes, property maintenance and repairs and so forth. We maintain capital reserves for these items – we make sure there is sufficient income and cash on hand to pay for any and all expenses.
If your property loses it's one and only tenant then it becomes 100% vacant. You will continue to have ongoing monthly expenses and you must make sure there are funds in your IRA to pay for such expenses. By investing with us you are participating in the ownership of hundreds of properties – we will never find ourselves in a situation where we have a 100% vacancy.
Royal Northgate prides itself on the structure of their funds and the solutions they offer those investors who desire to purchase real estate in their IRA's. As such we have teamed up with reputable IRA custodians who are able to oversee and manage your retirement accounts. IRA custodians are highly regulated by both State and Federal Government Agencies and are required to maintain certain insurance policies and are subject to stringent guidelines. It is essential that the IRA custodian you select is accredited and in good standing. While there is certainly no obligation to use our existing preferred custodians we do urge you to do your due diligence before selecting an IRA custodian. If you do have an existing custodian or would like to use a custodian that we do not have an existing relationship with, Royal Northgate will have to go through an approval process with your custodian so please take this additional time into consideration.